April 20, 2015

If you really needed a reason to be a stand-up character at work, it turns out that it's profitable. Fred Kiel is the co-founder of KRW International, and his new book, Return on Character is the result of their "seven year study of nearly 9,000 employees and the 84 CEOs and executive teams they work for at Fortune 500 and 100 companies and, privately held firms and nonprofits." Released by Harvard Business Review Press, you can expect the research to be thorough and well-documented, and it shows a direct link between CEO character and business success. But what does character look like in the real world, in the business world? What exactly is character? Kiel addresses that in Part 1 of the book, "Character Defined."

Coming to Terms with
Character

When you think of the term character,
what definition comes to mind? Many people immediately respond with answers
such as “honesty” or “truthfulness,” but human character actually encompasses
much more than those fundamental elements. It’s also much more than loyalty, or
integrity, or spiritual beliefs, fairness, or any other single value or principle.

True character rises from a
deeper well than religion. It is the internalization of the moral principles
of a society, augmented by those tenets personally chosen by the individual,
strong enough to endure through trials of solitude and diversity. The
principles are fitted together into what we call . . . the integrated self,
wherein personal decisions feel good and true. Character is in turn the
enduring source of virtue. It stands by itself and excites admiration in
others. It is not obedience to authority, and while it is often consistent with
and reinforced by religious belief, it is not piety.

Let’s look more closely at
Wilson’s assertion that character is the “internalization of the moral
principles of a society.” He’s telling us that a morally intelligent person is
one who knows what behavior is expected by his or her specific culture and
context as well as by human societies in general. Fortunately, we have some
idea of what kinds of moral principles shape nearly every culture’s
expectations for social behavior. Various cultural anthropologists have
cataloged lists of moral principles that they claim are universal for all
humans, lists that typically include some forms of expression for fairness,
compassion, and honesty. Anthropologist and author Donald Brown, for example, has
identified nearly five hundred behaviors and characteristics that all human
societies recognize and display. We drew from this list when we chose the four universal moral
principles of integrity, responsibility, forgiveness, and compassion—principles
demonstrated in a wide range of common human behaviors and attributes,
including:

• Distinguishing right from
wrong (Integrity)

• Language employed to
misinform or mislead (Lack of integrity)

• Redress of wrongs
(Responsibility)

• Self-control
(Responsibility)

• Cooperation (Forgiveness)

• Mediation of conflict
(Forgiveness)

• Empathy (Compassion)

• Attachment (Compassion)

• Affection—expressed and
felt (Compassion)

Steven Pinker, in The
Blank Slate: The Modern Denial of Human Nature, lists all of Brown’s
universals and, about them, he says, “Thus while conflict is a human universal,
so is conflict resolution. Together with all their nasty and brutish motives,
all peoples display a host of kinder, gentler ones: a sense of morality,
justice, and community, an ability to anticipate consequences when choosing how
to act, and a love of children, spouses and friends.”

Further evidence of these
human universal moral principles comes from a study that compared American
children with those in India. As my coauthor and I wrote in Moral
Intelligence, “The differences in values were predictable: Indian children
displayed more deference to elders and acceptance of tradition, while American
children value personal autonomy and freedom. But their moral codes were
virtually identical. Both groups of children believed that it was wrong to lie,
cheat, or steal, and both thought that it was important to treat the sick or
unfortunate with kindness.”

So while societies vary in
how they honor and express these moral principles—parents in one culture may
have a very different way of teaching their children about truthfulness than
those in another—in some form, these principles are embedded in the cultural
norms of all societies.

Wilson also makes a
powerful point when he says that strong character leads to the integrated
self—a joining of head and heart, where thoughts, feelings, and actions are in
harmony, resulting in behavior that demonstrates the character of an individual
who walks the talk of his or her belief system. Indeed, character has to
be expressed through behavior. Integrity, responsibility, forgiveness, and
compassion don’t live inside us. Our behavior, especially as demonstrated
through our relationships with others, is where our character comes to life.
Which means that, despite the common wisdom, character isn’t some hidden
quality that no one can really know or assess. We reveal our character all the
time through observable behaviors: in the way we treat other people. As we
mature, these character-driven behaviors become automatic reflexes, the
character habits that express our guiding principles and beliefs.

Beyond the way we
internalize universal moral principles, therefore, the definition of character
that informed our ROC research includes an understanding of how we demonstrate
those principles in relationship to other people. Accordingly, we define
character as an individual’s unique combination of internalized beliefs and
moral habits that motivate and shape how that individual relates to others.

While this definition
offers some solid footing for our observations about human character, it
doesn’t pave over every gap in our understanding. Each of us constantly makes
decisions about how to interact with other people, and each of those decisions
has the potential to either harm or enhance the other person’s well-being. So
it would seem logical to assume that we are moral and have strength of
character when our behavior enhances the well-being of others, and we are immoral
and have less strength of character when our behavior harms or detracts from
the well-being of others.

Of course, the real world
is complex, and so is the nature of our character. Many of the choices we make,
for example, may enhance the environment or outcomes of one person, while at
the very same time wrecking the lives of others. Finding a balance, wherein our
behaviors promote the most good for the most people, is the
ongoing task of all principled people of strong character. Adam Smith, the
widely quoted source of the “invisible hand,” which has become shorthand for
the notion that the unfettered and unregulated free market operates so that everyone
benefits, was not an economist but a moral philosopher.

In general, since the days
of Adam Smith, our society has recognized that honoring universal moral
principles such as integrity, responsibility, forgiveness, and compassion leads
to a higher standard of behavior and a safer and more secure world (which, by
the way, is good for business, as the ROC research data has shown). The ROC definition
of character is woven around those principles, which became the foundation for
KRW’s work in assessing leadership character and calculating the value it
brings to business results—and to our world.

About the Author

Fred Kiel, PhD, co-founder of KRW International, is considered one of the founders of the field of executive coaching. Also the author of Moral
Intelligence and speaker in the popular TEDx talk "Psychopaths in the C-Suite," he brings over 30 years of experience with Fortune 500 CEOs and senior executives on building organizational effectiveness through leadership excellence and aligning organization with mission.

About Dylan Schleicher

Dylan Schleicher has been a part of the 800-CEO-READ claque since 2003. Even though he's stayed on at the company, he has not stayed put. After beginning in shipping & receiving, he joined customer service and accounting before moving into his current, highly elliptical orbit of duties overseeing the ChangeThis and In the Books websites, the company's annual review of books, and in-house design. He lives with his wife and two children in the Washington Heights neighborhood on Milwaukee's West Side.

Inc. Magazine is celebrating 30 years of publication this month and as a part of their coverage have put together "The Business Owner's Bookshelf" - 30 books people running small businesses should read.
Here is the list in its entirety:
Against the Gods: The Remarkable Story of Risk, by Peter Bernstein (1996)
The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything, by Guy Kawasaki (2004)
The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger, by Marc Levinson (2006)
Brand New: How Entrepreneurs Earned Consumers' Trust from Wedgwood to Dell, by Nancy F.

The Org: The Underlying Logic of the Office by Ray Fisman and Tim Sullivan, Twelve, $26. 99, 320 pages, Hardcover, January 2013, ISBN 9780446571593
Just as market theory sits on the foundation of Adam Smith’s ideas, made famous in The Wealth of Nations, the study of organizational economics began with the work of Ronald Coase in a famous article entitled “The Nature of the Firm. ” Ray Fisman and Tim Sullivan explain in their new book, The Org:
Coase’s conception of the market involved a lot more friction and discord than Adam Smith’s original vision.

In conjunction with their Business Book of The Year Award, The Financial Times is asking the question: "What is the best book of all time? " They solicited suggestions from a wide variety of business executives, including GE's Jeff Immelt and Ebay's Meg Whitman. The editorial staff then created a short list using the same criterea as their yearly awards.